DETROIT -- With the deadline closing in on them, officials on both sides continued to predict yesterday that Ford Motor Co. and the United Automobile Workers union would sign a new labor contract by tonight, avoiding a strike.

Even if they miss the deadline, which falls at 11:59 p.m. tonight, negotiators are likely to continue talking, officials said, since they have not reached an impasse.

Such eleventh-hour bargaining is not unusual in automobile talks. If the two sides settled early, it would be harder for the company to convince its shareholders, and the union to convince its members, that they achieved, respectively, the leanest or the fattest deal possible.

"They're working hard, and they'll work into the night," said David M. Caplan, a Ford spokesman.

In Canada, where the Canadian Automobile Workers are facing a deadline today on a separate agreement with the Big Three automakers, talks appeared to be making progress yesterday.

After making an initial offer that displeased the union, Chrysler Corp., the lead company in the Canadian negotiations, made a richer offer over the weekend. The Canadian auto workers are seeking wage increases and more holidays.

Chances of avoiding a strike had improved, said Miriam Edelson, a spokeswoman for the Canadian union, but she added "there is still a long way to go."

Investors appeared to be optimistic about settlements. Ford stock gained $1.375 a share, to $55, in trading on the New York Stock Exchange yesterday. Chrysler rose $1.25, to $45.50, and General Motors Corp. was up 75 cents, to $47.50.

In the bargaining at Ford, the top negotiators -- Jack Hall, a Ford vice president, and Owen F. Bieber, president of the UAW -- did not plan to meet yesterday, instead directing bargaining by several subcommittees of representatives.

The most contested issues, including how to cut health care costs and insure greater job security, have not yet been settled, but such matters are traditionally not settled one by one. Instead, each subcommittee determines the cost of the benefits, and then the lead negotiators total them up to perform their last-minute horse-trading on the basis of a total economic

package.

Under the current contract, an assembly line worker at full scale earns $17.01 an hour, with 35 paid days off each year.

Once finished at Ford, the union will use the agreement as a pattern in bargaining with Chrysler and the General Motors, where the current three-year contracts have been extended indefinitely.

Ford has been seeking to force active and retired UAW members to contribute toward their health care coverage, and has also sought to reduce pay and benefits for newly hired workers. The UAW has rejected the idea of reducing any benefits, but has left open the possibility that new workers could be paid less initially and then gradually brought up to full wages.